It's a good idea to review your personal finances on an annual basis to make sure you are on track. West Banker Sara Larson offers 5 tips to ensure your personal financial health.
1. Identify your financial goals. You might be most interested in saving for retirement, your child's college, or maybe you want to take a big trip. When you identify what those goals are you will know how to adjust your finances accordingly.
2. Make a budget and stick to it. If you write down your income and expenses, it tends to be easier to stick to it and to hold yourself accountable. Make sure any estimates that are plugged in become more concrete as you go through the month. The more accurate the budget, the more accurate that bottom line. Then you'll know if you have a little extra money to invest or save. If you're breaking even or if you're actually short, you can look for places to cut expenses.
3. Pay down or pay off credit card balances. It's easy to charge more money than what you anticipated, especially during the holidays. Now is a good time to reduce credit card balances. Take a look at the big picture. Pay down the smaller balances cards first. Sometimes that seems a little counterintuitive, but those smaller balances are easier to tackle. Once one is paid off, go to the next one, and the next one. That snowball effect can really help to keep you motivated.
4. Save! Two things you definitely should set aside money for are retirement and emergencies.
Contribute to or increase your contribution to your 401(k) or IRA. Take a look at what you are contributing. When you get a pay raise, move 1-2% more to your savings plan and you won't even notice. If your employer offers to match part or all of your contribution, make sure you take advantage. It's free money!
It's recommended that you set aside enough money to cover 6 months of living expenses for unexpected expenses or loss of income. You can set up automatic deposits to your Rainy Day Fund through online banking. If you don't have six months of living expenses set aside, start now and save just a little each month. It's easy to increase that amount at any time as you watch your savings grow.
5. Review your credit report. If you haven't taken a look at your credit bureau report in the last 3 - 12 months, it's probably time to check it. You are entitled to a free credit report for each of the three reporting agencies, once a year.
Those are 5 easy steps you can make to ensure your personal financial health and help you achieve your financial goals.
Sara J. Larson was hired as Vice President/Branch Manager for the 1601 22nd Street, West Des Moines Branch in July, 2019 with over 22 years of experience in the financial services industry. She has experience in retail, management, audit/compliance, mortgage, lending and was also a state bank examiner. Originally from New Sharon, Iowa, she graduated from the University of Northern Iowa with a bachelor's degree in Finance and a minor in Psychology.
Active in the community, Sara serves on the boards of directors of the Waukee Public Library Friends Foundation and Greater Des Moines Partnership Business Resources & Community Development Board. She belongs to the Waukee Chamber of Commerce and is a Chamber Ambassador.
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